TN 23 (01-17)

A. Use of administrative sanctions

1. What causes an administrative sanction?

The initial criteria for applying an administrative sanction are as follows:

a. False or misleading statement

We impose a sanction when a person makes (or causes to be made) a statement or representation of a material fact for use in determining any initial or continuing right to, or the amount of, monthly insurance benefits under Title II or benefits or payments under Title XVI if:

• The statement or representation is false, misleading or omits a material fact which makes it false or misleading; and

• He or she knows or should know the statement or representation is false, misleading, or omits a fact that the person knows or should know is material and knows or should know that the omission of the fact makes the statement misleading, or the person makes such a statement or representation with knowing disregard for the truth.

NOTE: Material information is any fact the Commissioner may consider in evaluating eligibility for benefits or payment amount.

b. Failure to report material information

We may also impose a sanction when a person fails to disclose information that is material to determining any initial or continuing right to, or the amount of, monthly insurance benefits under Title II or benefits or payments under Title XVI if:

• The person knows or should know that the information is material to benefit eligibility, continuing eligibility, or amount; and

• He or she knows or should know that withholding the information is misleading.

NOTE: We consider all SSA forms and applications that require a signature (either a “wet signature” or an electronic signature) as statements.

2. Determining whether administrative sanctions are appropriate

The mere fact that the person makes a false statement or fails to disclose material information does not justify imposition of a sanction. You must also find, based on the reasonable inferences you draw from the evidence, that the person acted knowingly in making the false statement or in failing to disclose information, and that the person knew or should have known that the failure to disclose material information was misleading.

We do not impose administrative sanctions solely because of the type of event (like a double check negotiation). In addition, sanctions do not apply to potential fraud situations involving applications for Social Security numbers.

Consider the significance of the false, misleading, or omitted information in terms of its likely impact on the person’s benefits to determine if the person acted knowingly (see GN 02604.410).

In general, the less significant the false statement is in terms of its likely impact, the less likely it is that the person knew or should have known it was false or misleading. Consider conditions on a case-by-case basis.

Consider the significance of the false, misleading, or omitted information when deciding whether to pursue further evidentiary development.

While the amount of an overpayment caused may be relevant to determining whether the person acted knowingly, the law and regulations do not set a “tolerance” for the amount of money that has to be involved to justify a sanction. Depending on the circumstances, it may be appropriate to impose a sanction even though the false or misleading statement or failure to disclose creates an overpayment that is less than the amount of benefits we would sanction.

IMPORTANT: The Office of the Inspector General must review all cases for potential fraud before we impose administrative sanctions.

3. Whom can we sanction?

Under statute and regulations, administrative sanctions can apply to anyone (including a Title II or Title XVI applicant, beneficiary, recipient, representative payee) if the person’s actions meet the criteria listed in GN 02604.405A.1 in this section.

NOTE: We do not sanction institutional or organizational payees. For information about types of payees, see GN 00501.013.

When imposing sanctions in concurrent cases, the sanctions apply to benefits under both the Title II and Title XVI programs, regardless of the program under which the sanctionable act occurred. In the context of administrative sanctions, Title XVI benefits include federally administered State supplementary payments made according to 20 CFR 416.2005.

Depending on the circumstances, a statement under one program, either Title II or Title XVI, may cause sanctions under only the other program. For example, a person may make a false statement in connection with a claim filed under Title XVI that we deny. Years later, the person may become entitled to benefits under Title II only. We would then impose the sanction on the Title II benefits.

B. Effective dates to apply administrative sanctions

Administrative sanctions may apply to a person who makes any statement or misrepresentation of a material fact that is knowingly false or misleading or that knowingly omits a material fact. A sanction may also apply to a person who knowingly fails to disclose or report material information, even if the failure to disclose or report did not occur in connection with a statement that the person made.

Consider the following when establishing effective dates to apply administrative sanctions.

1. When administrative sanctions begin

a. Person does not request reconsideration

Sanctions begin the first day of the second month after the month reconsideration rights end on the decision to impose the sanction. EXAMPLE: if the period for requesting reconsideration ends on 01/10/16, a six-month period of nonpayment or ineligibility begins on 03/01/16 and ends on 08/31/16.

b. Person requests reconsideration

If we receive a request for reconsideration on the initial determination to impose a sanction and the reconsidered decision affirms that a sanction applies, the sanction begins the first day of the second month following the month we notify the person of the reconsidered determination. EXAMPLE: if we issue the notice 06/30, the sanction begins 08/01 and ends 01/31.

c. Difference in Title II and Title XVI dates

Although a sanction period must be the same for both Title II and Title XVI, the effect on payments is different. A beneficiary receives Title II benefits in the month following the month for which they are due, while a recipient receives Title XVI payments in the month due. EXAMPLE: if the sanction period is March through August, the actual payments affected for Title II are the benefits for March through August that the beneficiary would otherwise receive in April through September. The payments affected for Title XVI are those that the beneficiary would otherwise receive in March through August.

2. What if the person is ineligible to receive payments?

If payment is not due at the time we would impose the sanction, we would defer the sanction until the first month for which a payment is due under either Title II or Title XVI (see GN 02604.435C.). There is no limit on how long we wait to impose the sanction.

3. How does one sanction period affect the beginning of another sanction period?

If SSA imposes more than one sanction, a subsequent sanction period does not begin until the prior sanction period ends.

4. What happens when we do not impose the administrative sanction in time to stop the payment for that month?

Once we make a decision to impose a sanction for a specific period, the sanction must be for that period. When the Regional Sanction Coordinator concurs on the sanctions determination and notice(s), FO technicians should impose the administrative sanction and release the notice(s) within 14 days. If we do not process a sanction timely, we would impose it retroactively. Untimely processing creates an overpayment.

C. Length of the administrative sanction period

A sanction period lasts for a specified period of consecutive months. The sanction period is:

• 6 months for the first occurrence;

• 12 months for the second occurrence; and

• 24 months for each subsequent occurrence.

Once the sanction begins, it runs for the full term, even if there are intermittent changes to the payment status during that sanction period. The only exception to this nonpayment period is that the sanction ends with the month of death if a person dies while in a sanction period.

D. Detailed information about administrative sanctions

1. When and how do we inform claimants about administrative sanctions?

Current applications contain a statement warning against giving false information. Ensure that claimants are aware that sanctions may apply if they knowingly give false information or fail to disclose material information. All award letters for Title II and Title XVI payments include an enclosure that explains reporting requirements. This enclosure also warns that making false statements or knowingly withholding information may lead to an administrative sanction.

2. Do we include additional language about administrative sanctions at the Title II/Title XVI initial claim interviews and redetermination (RZ) reviews?

The interviewing technician discusses the administrative sanction penalty when advising claimants of the penalties for making a false or misleading statement or failing to disclose material information prior to the claimant signing statements or applications. The technician also ensures that the claimant is aware of the reporting responsibilities.

For more information about penalties, see GN 02604.000 and SI 02301.100.

3. Does an administrative sanction affect other beneficiaries or recipients on the record?

A sanction affects only the eligibility for benefits of the beneficiary or recipient whom we sanction. No other beneficiary or recipient should have an increase or decrease in benefits because of the imposition of the sanction.

• In Title XVI couple’s cases , if the couple is receiving benefits based on a couple rate and we sanction one member of the couple, the other person continues to receive one-half the couple rate during the sanction period, assuming the sanctioned recipient is otherwise eligible for SSI. In this situation, enter a remark on the Supplemental Security Record to document the exception to normal computation rules.

  For more information on how to pay couple’s benefits, see SI 02001.005B.

• In concurrent couple’s cases, if the member of the couple who is subject to the sanction is also entitled to a Title II benefit, consider the amount of the Title II benefit withheld due to sanctions as income in calculating the benefit amount of the other half of the couple.

  EXAMPLE: Each recipient of an aged couple is receiving both Title II and Title XVI payments. The husband receives Title II of $600 per month, while the wife receives $100. As a Title XVI couple, they are entitled to a combined payment of $189 a month ($94.50 each). We determine that the husband made a false statement and is subject to a sanction. His payments under both titles stop. The wife still receives her Title II payment of $100 and her Title XVI payment of $94.50.

• In Title II cases, if the family maximum affects the person we sanction, we do not increase the other auxiliaries/survivors’ benefits while we sanction that beneficiary. See Deduction-Before-Reduction (GN 02603.020).

  If we sanction the number holder, the sanction will not affect benefits of any other person on the record.

• When parent-to-child deeming is involved, the child’s rate does not increase because we suspend a parent’s benefit for a sanction.

4. Do administrative sanctions apply to any other benefits?

Sanctions apply only to Title II and Title XVI benefits (including federally administered State supplementary payments made according to 20 CFR 416.2005). Sanctions do not apply to Medicare or Medicaid benefits.

5. How do administrative sanctions affect a beneficiary who is entitled to Title II benefits on more than one record?

Sanctions apply to all Title II benefits that a beneficiary is entitled to on all records.

6. How are concurrent Title II/Title XVI cases affected?

If we sanction a beneficiary, the sanction applies to benefits under both programs for the same months. Remember we pay Title II benefits the month after they are due. If we impose a sanction for the six-month period from January through June, that person receives Title II benefits for the previous December in January, but no benefits in February through July (for January through June). Under Title XVI, the recipient does not receive benefits from January through June. Also, remember that the sanction period must be the same under both titles, so it is possible that the period can begin while a Title II disability claimant is still in the waiting period (see GN 02604.447J.6).

7. What happens if we discover a pre-existing underpayment on an administrative sanction case?

The law provides only for a period of nonpayment of benefits due for specified months. It does not stop payment of benefits due for any other period. If we discover an underpayment for either Title II or Title XVI for a month outside of the sanction period, we pay the sanctioned beneficiary, recipient, or representative payee.

8. What happens if an administrative sanction involves a pre-existing overpayment?

If we recover a prior overpayment (O/P), and we determine one or more months of recovery are part of an administrative sanction period, delay recovery of the O/P until after the sanction period is complete.

Regardless of the cause of the O/P, follow routine O/P collection procedures. If we suspend benefits for any reason, or terminate benefits when we withhold an O/P from monthly benefits, the beneficiary or recipient receives a notice to start making installment payments so we can recover the O/P. When and if the beneficiary or recipient goes back into pay, we deduct the balance of the O/P (or the agreed monthly installment amount) from the monthly payment.

9. How does the administrative sanction process affect existing policy about fraud and related issues?

Sanctions do not affect current policies about fraud, similar fault, civil monetary penalties (CMP), and related issues. Continue to follow existing instructions about those processes.

For instructions when making a medical or disability decision, refer to Disability Determination Services (DDS) – Disregarding Evidence (DI 23025.025).

Refer to Unrestricted Reopening for Determinations or Decisions Involving Fraud or Similar Fault (GN 04020.010).

For instructions on adverse re-openings, see Title XVI Administrative Finality – General Reopening Policies (SI 04070.010).

10. How does an administrative sanction differ from fraud and similar fault?

The standards and processes for determining fraud and similar fault are different from those required to impose sanctions. If the record contains fraud or findings of similar fault, it is helpful to include such documentation in the record, but those findings are not required as a basis for a sanction determination.

A finding of fraud can serve as a basis for imposing sanctions, but a finding of fraud requires a finding that the person acted with the intent to defraud, and we do not need to find intent in order to impose a sanction. A similar fault finding that the person knew a statement was false can also help our determination; we can impose a sanction if we find that the person knew or should have known that the statement was false.

11. Can we sanction a person if the representative payee knowingly made the false statement or misrepresentation?

If a payee knowingly made a false statement on behalf of the claimant or failed to disclose information that should have been reported, we can impose a sanction on the payee’s own record. If the payee made the false statement or misrepresentation or knowingly failed to disclose information without the claimant’s knowledge, do not sanction the claimant. However, if the evidence supports a finding that the claimant knowingly caused the payee to make the false statement or to not disclose disclose the material information, we can sanction that claimant.

Similarly, if a child who is his or her own payee knowingly gives false information or fails to disclose material information, we can apply sanctions, even if that child is a minor. Do not impose a sanction on a child because of the payee’s action whether or not the child knew about the action.

For more information on administrative sanctions in representative payee or authorized representative cases, see GN 02604.447I.

12. What happens when a sanction period begins?

Once the sanction period begins, it must run for a continuous period of 6, 12, or 24 months. Even if the payment status is intermittent, the period must continue.

13. Are sanctions and a Title II overpayment penalty mutually exclusive?

Under Title II, we do not assess a penalty simply because beneficiaries are overpaid. However, we can assess a penalty for failure to report when a beneficiary fails to report work or no-child-in-care timely.

For more information about when to assess a penalty for late reports, see GN 02604.100.

If the beneficiary meets both requirements for charging a penalty and imposing an administrative sanction regarding the same event such as work or no-child-in-care, you can charge both a penalty and a sanction.